By PAUL NELSON Staff writer

Published 1:00 am, Friday, January 8, 2010

SCHENECTADY -- The city is working to resolve a yearslong tax glitch involving a regional police training facility threatened with foreclosure, according to Corporation Counsel L. John Van Norden.

He described the $75,000 in taxes and penalties now owed to the lien holder by the nonprofit Zone 5 Law Enforcement Training Center as a "trap."

"The trap is that there is no way for a nonprofit to avoid this situation," he said, explaining the seemingly esoteric Real Property Tax law that often ensnares nonprofits who buy properties. "For a nonprofit to buy a property like this, they have to go into it with the idea they have to pay taxes."

In 2004, the Academy neglected to pay off outstanding back taxes when it acquired the property at 121 Erie Boulevard that had been previously owned by a money making venture. With interest and penalties, that amount has ballooned to $75,000.

Pat Smith, director of the academy, did not return a call Thursday seeking comment.

But the city has made overtures and is looking to broker a deal with the lien holder, American Tax Funding, that would erase the $34,000 that has accumulated over time. That would leave just the taxes.

"We can't forgive the taxes," he added.

He said later this month the governing body will likely vote on whether to approve a resolution authorizing the city to obtain the outstanding liens and then accept a payment of $41,000 from the Academy in satisfaction of the full $75,000 American Tax Funding is seeking.

Van Norden said his office has dealt with four or five similar cases within the past 5 years.

The Zone 5 Law Enforcement Training Center provides training to more than 65 state, county, city, town and village police agencies in a geographical area covering the 10 counties of the zone and other agencies whom have joined from other adjacent zones.